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Liverpool Echo
Liverpool Echo
Sport
Dave Powell

Manchester United bidder Sir Jim Ratcliffe may have hinted at John Henry's next move at Liverpool

Sir Jim Ratcliffe, the British billionaire who remains in the hunt to purchase Manchester United, has revealed his motivation behind pursuing such an expensive deal.

Ratcliffe, Britain’s second richest man and the founder of global chemical giant INEOS, is locked in a battle with Sheikh Jassim bin Hamad Al-Thani’s Nine Two Foundation to become the next owner of United, placed up for sale last year by the Glazer family, the unpopular custodians of the Old Trafford side.

The potential price tag has climbed to around the £6bn mark as both Ratcliffe and Sheikh Jassim seek to make the most compelling offer to the Glazers, with Liverpool owners Fenway Sports Group, who remain on the hunt for outside investment into the Reds, watch on with interest as to just how valuable an asset United is deemed to be. It is something that could impact FSG’s own valuation of Liverpool, understood to be north of £4bn.

When it was revealed in early November that FSG were considering selling Liverpool it took less than a week for the Glazers to finally kick the door open to a sale. FSG quickly turned their attention to a minority stake, potentially 10 to 15 per cent, as principal John Henry rejected the idea of a full sale and told the ECHO that the commitment of the ownership group remained firmly with Liverpool long term.

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It has been different for the Glazers. Where FSG, while criticised for a lack of transfer spend and being risk averse in comparison to their rivals, have sought to grow the club competitively through improving infrastructure, the Glazers, who take tens of millions out in dividends each year, have not placed the same emphasis on United, with Old Trafford a tired relic of a stadium when compared to the rest of the Premier League’s heavy hitters.

But despite the enormous cost to both acquire United and then fund the investment in a new or redeveloped stadium, Ratcliffe sees value in the long term. It is that long term view that has been the core reason behind FSG’s desire to remain custodians of Liverpool and not sell the club. With increased broadcast rights to come and the value of being among the elite to become ever more lucrative through improved Champions League money and competitions such as the revamped FIFA Club World Cup set to be financially impactful, there is a reason why top flight English football teams are sought after assets, especially when they have the scarcity value of a club like Liverpool.

“I am not parsimonious but I have never liked the concept of economic failure,” explained Ratcliffe in the upcoming book Grit, Rigour & Humour: The INEOS story, released to celebrate the 25th anniversary of the founding of the company.

“There are very few things I have done where I have ended up losing. There are things we have tried at INEOS, some investments we have made, where we were not successful and it is not enjoyable.

“Looking at Manchester United, my general view is that if we invest, even if the price tag is quite high, then in 10 years’ time, not two years’ time, we would probably be in a good place. I don’t think I am throwing my money away.

“I don’t think Manchester United would be a bad investment for us unless we were a dismal failure. And if we were, then we would expect to lose money.”

There is a longer term vision at play in European football right now, especially when it comes to the Premier League. The sport has almost turned into an asset class all of its own, and while it might not be the most profitable enterprise year on year when looking at the financials (Liverpool made a pre-tax profit of £7.5m despite record revenues of £594m) the value of the teams themselves continue to rise and there is confidence that the high watermark has not yet been achieved, especially given the value of teams in the major North American sports leagues.

Of course, remaining competitive is key to being relevant globally and tapping into the hundreds of millions of football fans around the globe who have their gaze fixed on the Premier League. However, it is becoming increasingly expensive to own such assets and even billionaires now find themselves having to find innovative ways of winning without spending the earth. That has kicked the door open to nation states and sovereign wealth funds, and it is they who will likely be the ones to try and acquire such assets in the future.

While that may arrive sooner rather than later for United, for the likes of Liverpool, FSG continue to understand the value the club has within its portfolio, and its significant potential.

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